Intel Corp. (Nasdaq: INTC) paid out smaller cash bonuses to some of its top executives in 2022, a year in which the chipmaker struggled and began a cost-cutting initiative.
CEO Pat Gelsinger received a $945,900 incentive-based cash bonus, down from nearly $5 million in 2021, according to a regulatory filing released Friday. Sandra Rivera, who heads the company’s data center and AI group, received $604,300, down from $1.7 million a year earlier.
The filing also revealed that Intel gave Christoph Schell $20 million when it hired him away from HP Inc. in February to become executive vice president and chief commercial officer. The award was described as a “make-whole cash payment” to compensate Schell for $33 million he gave up in leaving HP.
Revenue at Intel, which employs more than 20,000 people in Hillsboro, fell 20% and its profit was down 60% in 2022. It slid especially hard in the second half of the year as global semiconductor sales slowed amid plummeting PC shipments. The company also lost market share in the data center market to Advanced Micro Devices Inc.
$3 billion cost cutting
Intel began layoffs and other cost-cutting measures late last year, aiming to shave $3 billion in annual spending on the way to reductions of as much as $10 billion in 2025. In late January it announced temporary base-pay cuts ranging from 25% for Gelsinger down to 5% for midlevel managers, among other compensation reductions, and a few weeks later said it would cut its quarterly dividend.
Bonus revealed Friday were paid to five top Intel executives — the company’s named executive officers, or NEOs, in corporate parlance — based on targets in four categories. A formula equally weighed revenue, gross margin, a multipronged metric called “One Intel operational goals” and individual performance for all but Gelsinger, who does not have an individual performance element to his assessment “as he is ultimately accountable for the financial and operational performance of the company.”
If all the targets were achieved Gelsinger would have earned a $3.4 million bonus and the other executives just under $1.4 million apiece.
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Intel failed to meet a minimum revenue threshold on revenue, so the executives received nothing in that category. The performance on gross margin was so poor that they were all penalized 40% in that category. The executives rated on individual performance all scored 95% to 110% in the category.
One Intel goals
On the One Intel goals, the score was 133.8%, applied across the board to the executives. Areas assessed included “deliver on product leadership,” “regain process leadership” and “sustainability leadership” related to the company’s corporate responsibility strategy.
But the compensation committee adjusted the One Intel score down to 122.55% in factoring it into the executive bonuses.
“While 2022 was a challenging financial year for the company, the compensation committee does not believe it is inconsistent to have performed below threshold against our financial goals but above target against our goals that tie to the longer term,” it stated in the filing. “Nevertheless, the compensation committee determined it was appropriate to reduce our NEOs’ One Intel operational goal payout.”
For the year, the three other named executives beyond Gelsinger and Rivera received bonuses between $503,000 and $621,300.
As for total compensation, Gelsinger’s was $11.6 million, including $1.3 million in base salary, the nearly $1 million cash bonus, more than $8.8 million in stock awards and almost $500,000 in “other compensation.” In 2021, the year he was hired, $170 million in stock awards pushed Gelsinger’s total compensation to nearly $180 million. Rivera, the other executive who had a comparable position in 2021, saw her total compensation fall from $9.8 million in 2021 to around $7.6 million last year.
Intel declined to comment on the information revealed in the Friday filing.
Source
https://www.bizjournals.com/portland/news/2023/03/31/intel-execs-2022-bonuses.html